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Most energy firms in Canada's Alberta to further cut costs -survey

Published 2017-02-23, 07:54 p/m
© Reuters.  Most energy firms in Canada's Alberta to further cut costs -survey

CALGARY, Alberta, Feb 23 (Reuters) - Most oil and gas firms in Canada's oil-rich Alberta, which cut costs following the crude crash in 2014, are looking to run even leaner, according to the author of a report from professional services firm EY released on Thursday.

The report was based on a survey of a representative sample of 72 oil and gas companies, which found that 70 percent of respondents intend to make changes to be more efficient, measures which may include reorganization or cutting staff, said its author Lance Mortlock.

"I think every organization in this sector in Canada is thinking, 'How do we run leaner?'" he said in an interview.

The western province of Alberta is home to Canada's vast oil sands deposits and is the top exporter of crude to the United States. It was hard hit by the collapse in global crude prices since mid-2014, as producers laid off tens of thousands of oil and gas workers and cut billions in capital spending.

Mortlock, EY's Canadian strategy services leader for oil and gas, declined to name the companies surveyed, but said they come from all areas of the industry and most are publicly listed.

The report, compiled in partnership with the Alberta's University of Calgary, found that 80 percent of companies surveyed have reduced their staff over the last two years.

"We're seeing, in the case of oilfield service companies, sometimes more than a 50 percent reduction in headcount," Mortlock said.

Many respondents that cut staff reacted to low commodity prices with a focus on short-term survival, which is not surprising given the intense pressures to manage costs, the report said.

But a majority of those surveyed reported "high levels of success" with their "reorganizations," according to the report.

Mortlock said high-performing companies are ones that also have a long-term strategy for remaining viable, rather than just cutting staff as a short-term tactic.

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